neither MP3tunes nor Robertson could be held directly liable for a public display of cover art.^2764
-- The court granted JMOL to Robertson with respect to certain statutory damages
pertaining to cover art. Specifically, although the plaintiffs had submitted general evidence that
cover art was available to digital service providers at the same time as the songs, and that cover
art was generally commercially exploited by publishers through the use of merchandise, there
was no evidence that each and every cover art work was made available separately. And there
was no way to determine, based on the trial record, which cover art was or was not available
separately. Had the plaintiffs proved that the cover art was available separately, then they could
recover for infringement of such art separate from the recovery of the sound recording. But they
did not. Accordingly, the court ruled that recovery was available only for cover art for which the
plaintiffs had not recovered on a sound recording.^2765
-- Finally, the court granted Robertson’s motion for a new trial on the punitive damage
award (based on the plaintiffs’ unfair competition and common law copyright claims for any pre-
1972 sound recordings in suit) unless the plaintiffs elected to remit the jury’s punitive damage
award from $7.5 million to $750,000. The court found that the $7.5 million punitive damage
award violated due process, largely based on the fact that the plaintiffs had sought, and the jury
awarded, only nominal actual damages of $1 per work. The court noted that the effect of its
rulings on willful blindness and red flag knowledge had reduced the nominal damages award to
only $40 (Robertson and MP3tunes remained liable for 40 pre-1972 works – “Strawberry Fields
Forever,” 16 works sideloaded by executives, and 23 works from source domains seen by
executives that were obviously infringing). Given this tiny amount of actual damages, a punitive
award of $7.5 million was grossly excessive.^2766
u. Obodai v. Demand MediaIn this case, the owner of a copyrighted work sought to hold the operator of a humor
website, Cracked.com, liable for the posting of the plaintiff’s work by a third party. The plaintiff
did not notify the defendant that the third party had posted the plaintiff’s work on Cracked.com
before filing suit pro se. The court ruled that the defendant satisfied all the requirements for the
Section 512(c) safe harbor. The defendant had adequately adopted and implemented a policy to
terminate repeat infringers because Section 16 of its web site Terms and Conditions stated that
Cracked could terminate any account or user for repeated infringement of intellectual property
rights, including copyrights, and reserved the right to terminate an account or user for even one
instance of infringement.^2767
(^2764) Id. at 39.
(^2765) Id. at 45-46.
(^2766) Id. at 58-71.
(^2767) Obodai v. Demand Media, Inc., 2012 U.S. Dist. LEXIS 83109 at 3, 11 (S.D.N.Y. June 13, 2012), aff’d, 2013
U.S. App. LEXIS 10734 (2d Cir. May 29, 2013). The Terms and Conditions also listed the physical and email
addresses of its copyright agent and set forth information that a copyright holder should forward if it believed
that Cracked contained infringing content. Id. at *24.